A US Company Sells Merchandise to a Foreign Company Denominated in in U.S

question 26

Multiple Choice

A U.S. company sells merchandise to a foreign company denominated in U.S. dollars. Which of the following statements is true?

• A) If the foreign currency appreciates, a foreign exchange gain will result.
• B) If the foreign currency depreciates, a foreign exchange gain will result.
• C) No foreign exchange gain or loss will result.
• D) If the foreign currency appreciates, a foreign exchange loss will result.
• E) If the foreign currency depreciates, a foreign exchange loss will result.